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Is this legal

Leic_clms
Posts: 4 Newbie
Hi
My partner gives over 50K as a gift to assist in the getting the mortgage. The agreement with the solicitors reads:
agreement was that the money of ‘by the way of gift in respect of the deposit for the above property and the money is in on the way repayable’, and ‘I will have no rights or interests in the property whatsoever, including occupational and financial.
Now the person who the money was given, to is paying back the 50k as 'rent', as they entered into a 'private agreement'. Is this legal.
My partner gives over 50K as a gift to assist in the getting the mortgage. The agreement with the solicitors reads:
agreement was that the money of ‘by the way of gift in respect of the deposit for the above property and the money is in on the way repayable’, and ‘I will have no rights or interests in the property whatsoever, including occupational and financial.
Now the person who the money was given, to is paying back the 50k as 'rent', as they entered into a 'private agreement'. Is this legal.
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Comments
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By "in on way" do you mean "in no way"...? It makes a big difference!
Depends who is asking. The lender might be concern that the financial position of the mortgage-holder is not as good as they thought. Presumably they didn't know about the "hidden" repayment agreement. If they did, there would be no point gifting it, as they would take it into account as a liability.
Those who have only £5k debt when asking for a mortgage are being turned down or told to pay it off...there's no doubt a £50k debt would affect their lending decision.
Both parties may be considered to have committed fraud upon the lender.
Are you going to report your partner?0 -
Thanks Cannon Folder - you are correct the text should have read:
by the way of gift in respect of the deposit for the above property and the money is in no the way repayable’, and ‘I will have no rights or interests in the property whatsoever, including occupational and financial'
I suspected that this action was not totally legal, but the question is notify who the mortgage broker, the original solicitors, or is there a governing body?0 -
So we have an artificial arrangement: person A "gives" person B a large amount of money as a "gift", but really person B is expected to pay it back to A.
But if A doesn't own the property, then how can B pay them "rent" on it?
Whatever the skulduggery involved, my guess is that the mortgage company needn't know about it and wouldn't care so long as their monthly payments are coming in without trouble. I think that families have been lending people the deposits on their mortgage for many a year, and I don't think it was even frowned on.
(I'm not sure what the taxman would have to say about B's income though...)0 -
Looks like fraud to me, or whatever obtaining advantage through deception is.
This could get just as messy as them buying part of the place and being on the mortgage if you split,
The person is mad to give someone £50k as a gift(documented) and then have a verbal I will pay you back honest guv.0 -
I agree, the person giving the £50k is on a sticky wicket by giving an agreement in writing that it's a gift, but expecting "rent" on the amount. Also as mentioned it would presumably be mortgage fraud, in that the mortgage would probably not be offered if they knew about the private agreement, and the statement about not having any interest appears to be false.0
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Hi Prowla - the inital arrangement of the gift was to take out a new mortgage for a new property. Does that change your opinion?
Reading this string - Is seems to be fraud - but do I have an obligation to declare this information? If to who? Do I need to let the original solicitors know or is there a governing body?0 -
Cannon_Fodder wrote: »By "in on way" do you mean "in no way"...? It makes a big difference!
Depends who is asking. The lender might be concern that the financial position of the mortgage-holder is not as good as they thought. Presumably they didn't know about the "hidden" repayment agreement. If they did, there would be no point gifting it, as they would take it into account as a liability.
Those who have only £5k debt when asking for a mortgage are being turned down or told to pay it off...there's no doubt a £50k debt would affect their lending decision.
Both parties may be considered to have committed fraud upon the lender.
Are you going to report your partner?0 -
I don't understand your involvement in this or why you want to report it? You say in the original post that it was your partner who lent the £50k - why do you want to report them for fraud?
They may well have done something wrong but surely that's nothing to do with you - it seems a bit vindictive to try to get them into trouble unless this is affecting you in some way which you haven't explained?0 -
This is mortgage fraud plain and simple. The mortgage company wants to know your financial posistion before agreeing to finance any security, and they want to see that the applicant is providing some kind of finance towards the transaction. The lender would not be best pleased to find out the deposit was sourced from a loan...I am a mortgage advisor:A0
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